Thank you, Mr. Chair. I will go first, if that's all right.

My name is Annette Ryan. I am the associate assistant deputy minister of the financial sector policy branch within the Department of Finance. I am joined by Robert Sample, director general of the financial stability and capital markets division, as well as Judy Cameron, managing director of the Office of the Superintendent of Financial Institutions Canada, and her colleague. We are pleased to appear before you today.

My remarks today will address two areas that, I believe, are pertinent to the issues before you. Specifically I will clarify the roles of government departments and agencies and private sector actors within the federal financial sector framework and update the committee on efforts being undertaken by the Department of Finance, federal regulatory agencies and banks in support of cybersecurity and data protection.

Protecting the privacy and security of Canadians' personal and financial data is an objective shared by both levels of government and the private sector, and it is one that's crucial for maintaining continued trust in Canada's banking system.

I'll address the roles within the federal government and then discuss provincial government and private sector roles.

The Department of Finance along with federal financial sector oversight agencies has responsibility for the laws and regulations that govern Canada's federally regulated banking system. We collectively set expectations and oversee implementation to ensure that operational risks related to cybersecurity and privacy are properly managed by the financial institutions that we regulate.

The Minister of Finance has overarching responsibility for the stability and integrity of Canada's financial system. Cybersecurity is a primary aspect of financial cyber-stability as it ensures the sector remains resilient in the face of cyber-threats and attacks

In turn, Public Safety has recognized the financial services industry as being a critically important sector within its wider national critical infrastructure strategy.

The Department of Finance works closely with a range of partners responsible for financial regulation and cybersecurity both domestically and internationally to ensure that the sector is adopting appropriate cyber-resiliency and data protection practices and that the specific needs of the financial sector are considered within economy-wide policies and statutes that relate to cybersecurity and data security.

I'll describe the general responsibilities among financial regulators. The Office of the Superintendent of Financial Institutions is the prudential regulator of federally regulated financial institutions, including banks. OSFI develops standards and rules for managing cyber-risks as is consistent with its wider oversight of operational risks that institutions must manage.

The Bank of Canada monitors financial market infrastructures, such as payment systems, to enhance resilience to cyber-threats, and the bank coordinates sector-wide responses to systemic-level operational incidents.

Other federal agencies have responsibilities for laws of general application in respect of privacy. The Office of the Privacy Commissioner of Canada oversees the banks' compliance with Canada's private sector privacy legislation, the Personal Information Protection and Electronic Documents Act, known as PIPEDA. PIPEDA sets out requirements that businesses must follow when collecting, using or disclosing personal data in the course of commercial activities. These include putting in place appropriate security safeguards to protect personal data against loss, theft or unauthorized disclosure.

The Department of Innovation, Science and Economic Development has overall policy responsibility for PIPEDA. In November of 2018 the Government of Canada implemented amendments to PIPEDA related to data breach reporting requirements and associated monetary penalties for failing to report.

As you've just heard, other federal departments and agencies, including Public Safety, the Canadian Centre for Cyber Security and the RCMP, share responsibilities with respect to broader Government of Canada cybersecurity initiatives.

It is important to note that supervisory responsibility for the financial sector in Canada is divided between federal and provincial governments. Provinces are responsible for the supervision of securities dealers, mutual fund and investment advisers, provincial credit unions and provincially incorporated trust, loan and insurance companies.

Accordingly, federal and provincial financial sector authorities have protocols in place for information sharing, particularly where matters of financial stability are concerned. Financial institutions, themselves, of course, are most immediately responsible for maintaining cyber and data security on a day-to-day basis, directly managing operational risks through an extensive series of protective and preventative measures, both individually and through industry-level co-operation.

These are supported by policies and standards that are continually updated to address the evolving threat landscape and remain in line with industry best practices.

Cyber-attacks are a serious and ongoing threat. I will focus on some of the steps being taken by the Government of Canada, the financial sector, regulatory agencies and the banks to ensure cybersecurity in the financial sector.

In budget 2018, the federal government invested over half a billion dollars in cybersecurity, and in October of 2018, it established the Canadian Centre for Cyber Security, which serves as a single window of technical expertise and advice to Canadians, governments and businesses. The centre defends against cyber-threat actors that target Canadian businesses, including federally or provincially regulated financial institutions, for their customer data, financial information and payment systems. Efforts to address cybercrime have been further bolstered by the newly created national cybercrime coordination unit within the RCMP, which provides a national cybercrime reporting mechanism for Canadians, including incidents related to data breaches or financial fraud.

More recently, in budget 2019, the government proposed legislation and funding to protect critical cyber systems in the Canadian financial, telecommunications, energy and transport sectors.

Our colleagues at the Treasury Board Secretariat continue their work with provincial governments, financial institutions and federal partners toward a pan-Canadian trust framework for digital identity with the goal of strengthening digital ID protection in the context of cyberthreats.

On the regulatory side, earlier this year OSFI published new expectations on technology and cybersecurity breach reporting via the technology and cybersecurity incident reporting advisory. This is intended to help OSFI identify areas where banks can take steps to proactively prevent cyber incidents, or in cases where incidents have occurred, to improve their cyber-resiliency.

While the first objective is to prevent data breaches, the reality is that these events happen and are not localized to the financial sector. Having said this, when cyber events occur at a federally regulated financial institution, control and oversight mechanisms are in place to manage them.

To summarize, cybersecurity is an area of critical importance for the Department of Finance. We are actively working with partners across government and in the private sector to ensure that Canadians are well-protected from cyber incidents and that when incidents do occur, they're managed in a way that mitigates the impact on consumers and the financial sector as a whole.

Thank you for your time. I'm happy to take questions.